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Irrigation as a business: Rules & Regulations?

Can somebody use irrigation for business purposes? Like drilling a bore well or tank and supplying the water to farmers for a fee. Are there some government rules and regulations against or regulations on this kind of practice.Can anybody please guide me on this point.

 Joy Biswas




Dear Joy Biswas,

There are clear instructions by different government authorities that water supply as a business is not permitted. However, if the bore well owner has sufficient waters and there is no water facility in the adjacent agricultural land he can supply waters through delivery channels (pipes) to his storage facility for further distribution by him in his agricultural farm.

It is always advisable in such a case to have a written agreement with his neighbor to avoid future litigations. It is not advisable to supply waters on a regular basis, as a commercial proposition; through tankers as such supplies are to be permitted by local governing authorities.


Dr. P Ramachandra Reddy
Emeritus Scientist
National Geophysical Research Institute Uppal Road
Hyderabad - 500 007

2. Need help to start irrigation/borewell business


I am Mohm. Afsar Mohiuddin, B.Tech, Mechanical Engineer. I want to start borewell business at Zaheerabad, NH-9. Please help.


Dear Joy Biswas,

As per State legistation, the land owner has the right to the groundwater extracted from under his land. So far there is no legislation to prevent one person to extract water from his land and sharing extra water with his neighbors free or against a payment. In fact, many districts of Gujarat have a well developed water market wherein one farmer sells irrigation water to another against payment. Contrary to this, Surface water (river, tanks etc.) are the State property.

Theoretically, water marketing works when a) one person has got plenty of water from his well while his neighbors’' wells have failed and b) when the neighbors are poor to install a well (deep bore well) and deep well pumps.

However, the former condition

(a) is very rare because if one person has got water under a given hydrogeological set up, his neighbors’ are also likely get groundwater under those conditions. It is usually the latter condition

(b) that leads to water (irrigation business) markets. Dr. Tushar Shaw, Director, IWMI, Sri Lanka has many research papers on this aspect of water marketing. Water markets also exist in WB, Bihar and UP.

However, of let some adverse public opinion is building up against this practice. One reason being that the groundwater extracted from under one's land in fact is not confined to his land alone. Groundwater occurs in aquifers that are regional in nature. The well is actually an extraction point only for a large natural system. Groundwater for this reason is viewed more as a community resource than an individual well owner's resource. Besides, selling water to a neighbor at a price is also viewed by many as an exploitative practice.

However, if you form a formal or informal group of farmers and develop irrigation water sources for common and equitable use by all members, then you will be credited with doing a development project. You can also consider a model known as Community Tubewell.

I hope this small note will help you to decide your mind.

With best wishes.

Mihir Maitra
Water Resources


Dear Joy Biswas,

This is in reality a business and, ethically speaking, it should not be so. It has great social, environmental and economic implications. Economists such as Mihir Shah, hail it. In the backdrop of a poor water management in all groundwater depletion areas e.g., Gujarat, Central Maharashtra or Central Karnataka it has created havoc in the form of depressed water levels and drying wells. In west Bengal it may be the major cause for excess arsenic in water wells.

It also depicts how weak is our legal provisions on water and water rights. It directly displays the state that whosoever has the money to drill a well or buy a pump has more right on water than others.

Dilip Fouzdar
Water Resources Consultant
New Delhi


Dear Joy Biswas,

I am not aware of rules, if there are any. But yes, I am aware of some farmers in Rajasthan who had excess water from their dug well or tubewell. As a matter of business understanding they agreed to supply water for certain period of time for a cash charge. One farmer, I know was supplying water to about 10 farmers besides a small piece of land that he was farming himself. I don't have any recent contact, but this observation is over 10 years back.

This was a good win win arrangement to both parties.

If I do this, I shall prefer dealing in cash, rather than "water on credit" or on the basis of "sharing crop/profit sharing basis".


M.M Sharma
Project Officer
International Crops Research Institute for the Semi-Arid Tropics (ICRISAT-IN)
Consultative Group on International Agricultural Research


Govt rules do not permit supply of borewaters from an agricultural farm to others as a business.However, if you are interested in supplying water to your adjacent land where there is no water facility it can be done so by entering into a written agreement with your neighbour.

The bore well waters in such a case can be supplied through pipes to a storage tank for further distribution in his land.It is not advisable to supply water through tankers as such supplies need to be approved by local governing authorities.

Emeritus Scientist


To start with it is necessary to restate your question more accurately. First, the business element in your idea is not irrigation, but salel of water. What the buyer does with this water is immaterial. Second, you can not club a bore well and a tank as merely sources of water. There is a huge difference in the legal position regarding ownership of water from these two sources.

You can sell only that which belongs to you. As regards bore well, the law is that a man has full rights to all the water he can extract from the piece of land owned by him. And the law says nothing about what he may do with that water. Therefore it would seem there is no law to prevent you from selling water from a borewell.

However, there is a legislation in the domain of environment by which you can be prevented from drawing so much water as may harm the environment. But there are two issues here that are unclear One, what is the definition of “harm the environment”. Two, how does one fix the responsibility for the “harm” on a particular borewell.

All this not withstanding, farmers near the city of Chennai have been selling ground water from their farms to the Chennai Metro Water Company. And also, activists in Plachimada (Kerala) have successfully prevented Coca Cola company from using the ground water from the land owned by Coca Cola. Thus, the question reduces to - who may want to stop you from selling it ?

As regards water from the tank, there is no law that defines ownership of water. If the tank is on public land then there is no question of an individual selling the water. If it is on a land that is entirely owned by you then I think there is nothing to prevent you from selling the water, but the lawyer from the opposite side may be able to find some way to stop you. e.g. it may be argued that the water was collected from catchment which was public land. (selling legal advice is a more lucrative profession than selling water !)

Finally, your question can be expanded to – whether water markets are legal. On one extreme there are some who are opposed to even bottled water because they think selling water is a sinful. At the other extreme there are many who believe that allowing people to sell the water would result in their using the water more efficiently, so that they have a surplus to sell, and the buyer also, having paid for it, will use it more efficiently.

In this scenario you may be able to sell even the canal water, i.e. your share of the canal water, if for some reason you have no use for it. However, all this is not as easy as it sounds, there are some messy issues to be resolved, starting with how to determine the shares.

Chetan Pandit


Dear Biswas,

With his experience of serving as a Consultant for some time to Andhra Pradesh State Irrigation Development Corporation (APSIDC) Limited, a government agency created to sell irrigation water pumped from both surface bodies and wells to farmers, Dr. P.R. Reddy must be quite aware of the government rules.

The APWELL Project was one big project taken up by the APSIDC in 1995 with a grant of 6 million euros from the Netherlands Government to drill 3460 successful bore wells in 7 drought-prone districts of Andhra Pradesh for sharing irrigation on payment basis by thousands of small and marginal farmers through seven NGOs and 230 bore well users’ associations.

Most farmers in India find it more convenient to use groundwater rather than surface water for irrigation. Most big landlords who owned surface bodies to irrigate their lands found it more convenient to switch over to well irrigation. It can be known from that the net area irrigated by private canals which was 1.36 million hectares soon after India attained independence is now 0.19 million hectares. In view of this, it is worthwhile owning wells rather than tanks and canals to sell irrigation water.

Compared to selling water for irrigation, a much higher return is obtained in selling groundwater for domestic and industrial use through tankers. Many farmers close to urban and industrial areas find it more lucrative to keep their agricultural lands fallow and sell groundwater saved for such high-end uses.

As the profit margin in the sale of groundwater for irrigation is not that high, the tendency of farmers is to maximize use of groundwater in their own lands by growing water-intensive crops rather than sell groundwater.

Despite that, there are many farmers with small land holdings owning high-yielding wells to sell irrigation water to nearby needy farmers. As groundwater from own wells costs less than the purchased water, every farmer strives to develop own groundwater sooner or later.

In view of small land holdings with every farmer striving to irrigate land with own well, the cost of development of groundwater in India has become exorbitantly high with enormous number of low-yielding wells. This is substantiated from the statement of Dr. Tushaar Shah that India pumps groundwater for irrigation through 19 million wells with each well discharging on the average 7.9 thousand kilolitres per year, while the corresponding figures for USA are 0.2 million wells with each well discharging on the average 500 thousand kilolitres per year.

Although local farmers find no problem to sell irrigation water to fellow farmers, there can be problems from some NGOs if outsiders or foreigners own local waters for trade. As rightly stated by Chetan Pandit, these NGOs make every effort even to close industries owned by foreign companies that use groundwater on a large scale.

Hope this information will be of some use in your plans to enter into water trade.

Dr. R. Jagadiswara Rao
Retired Professor of Geology
Sri Venkateswara University
Tirupati, AP 517502

Dr. R. Jagadiswara Rao, Professor of Geology Retired, Sri Venkateswara University, Tirupati, AP 517502, India


Dear Joy Biswas,

There are many public tube-wells in the country being operated under the state minor irrigation departments where they do supply irrigation water to farmers for a fee which is collected after the harvest of the crop. But for a private tube-wells like farmer owned tube-wells, there is no restricted for a new tube-well and only they need to do is to register with central groundwater authority under new regulation.

For irrigation tube-wells as business, as far as I understand, there is tighter rules and regulation for a new tubewell that too heavy discharge one, in ground water declining areas as these tubewells will withdraw heavy discharge and further aggravate water table decline problem.

There is little relaxation for new private tubewells in water table rising areas. I think you should speak to Central Ground Water authority (under Ministry of water resources) having office in each zones of the country. If there is further new regulations/development, they will guide you in the matter. The authority office is located in the Zonal office of Central ground water board. For further details, kindly browse the Central Ground Water Board‘s website

Hope it will serve your purpose.

Dr. D.S Bundela
Senior Scientist
Soil & Water Conservation Engineering
Division of Irrigation & Drainage Engineering
Central Soil Salinity Research Institute CSSRI


Dear Joy Biswas,

Presently there is no rule or law prohibiting anybody from drilling a bore well/tube well or constructing an open well on one's land and selling the water to others for a fee or a price. In fact it is already happening in many places for so many years. It is called informal water markets.

Since groundwater operates under private property regimes anybody is free to extract groundwater which is available under one's land and use it personally or sell it. The water is being sold not only for irrigation purposes, but the groundwater from the rural areas is also being transported to cities and sold there for exorbitant prices. Chennai and the peri-urban areas is an interesting case in this regard.

There are also conflicts developing between those well owners who want to extract unlimited amount of water and those well owners whoa re against such mining of water selling in the cities.

Recently many states are coming up with groundwater acts which try to regulate the drilling of bore and tube wells especially in terms of the distance to be kept between wells, etc. In the case of Maharashtra the government has passed the Maharashtra Water Resources Regulatory Authority Act (MWRRA) promulgated in 2005 has also brought groundwater under the regulatory framework. However, it does not prevent anybody from extracting water through wells and use or sells it.

If the wells are within the existing irrigation command areas then the irrigation/water resource department can levy a charge on the well owners on the basis of are-crop basis. In most of the states the irrigation acts provide for this. Usually the rate is about 50% of the prevailing rate of irrigation water. However, it is very seldom this provision is utilized.

However with participatory irrigation management (PIM) in place in many states and the Water users' Associations (WUAs) as the main institutional mechanism of water management the wells in the command area are also brought under the jurisdiction of the WUAs and the WUAs can charge a levy/price for the water from the well. The PIM act in Maharashtra does have such a provision. The logic here is that the water in the well is primarily from the percolation of canal water.


K J Joy
Society for Promoting Participative Ecosystem Management (SOPPECOM)


Dear Joy Biswas,

I do agree with Mr. Chetan Pandit, that one should not oppose developmental programs. But, at the same time one should not allow selfish individuals to over exploit our natural resources, including ground water, leading to closure of even existing facilities. Ground water is not a replenishable commodity, in regions that suffer from poor surface conditions.

Soils that have poor porosity and layers of subsurface formations that have poor permeability do not allow proper percolation of surface flows into the subsurface aquifers. This type of formations is present all over our country, both in hard and soft rock terrains. We need to keep in view that the limited ground waters available for irrigation need to be properly utilized, introducing new irrigation practices.

Flow irrigation needs to be restricted to areas that are fortunate enough to have surface water flows. In such a scenario educated and enlightened persons like you need to advice individuals who want to transport groundwater commercially for irrigation to be rational and objective.

Even a commercial venture that can help proper development would be supported by one and all. I mentioned in my earlier letter to confine the commercial transportation to the adjacent lands only, keeping in view all the above factors and the unavailability of the proposition as a sustainable one.

I am not in a position to quote off hand the details sought by you, about laws and acts, as I am away in US. Basically, due to limited quantities of waters in borewells located in hard rock areas in A.P, Karnataka and Tamilnadu it was decided years back by the state Government to control drilling of borewells for irrigation. I have learnt that the Government authorities have been instructed through a G.O (at least in A.P) couple of years back, to stop owners of highly productive borewell owners from transporting ground waters even for drinking water purpose.

I have tried to ventilate my thoughts, keeping in view the degrading water resources scenario. Details given above may not satisfy the individuals interested in exploiting groundwater resources for commercial purpose, without knowing hydrogeological parameters.


Dr. P Ramachandra Reddy
Emeritus Scientist
National Geophysical Research Institute


Dear Joy Biswas,

In continuation of my earlier reply I have couple of more details to make things clear. Hope the earlier and present details would be of some use.

It is not clear from the original question about the whereabouts of the borewell, type of borewell, depth of the borewell, geological and Lithological particulars, proximity of other borewells to ascertain that there is no interference, yield from the borewell, area presently under irrigation using these borewell waters, type of irrigation practiced, the quantum of extra water the concerned wants to use for commercial purpose, mode of transportation, distance of the identified source for irrigation, type of the cropping pattern and irrigation practices, extent of the acreage to be irrigated.

These details, if known, we can give needed advice regarding exploitation of ground waters for a sustainable development. Usually State Ground Water Department gives proper advice regarding usage of both low and high yielding wells (including artesian wells).


Dr. P Ramachandra Reddy
Emeritus Scientist
National Geophysical Research Institute


I am glad to know that Dr P R Reddy “agrees with me” (that one should not oppose development programs). But I had said no such thing – please read my reply again – so the question of agreeing with me on that point does not arise.

Joy Biswas had asked a question purely in the domain of law – does the law allow/ prohibit sale of water. But Dr. Reddy is trying to reply it from the perspective of technical feasibility, sustainability, and ethics. One may provide information on these aspects as supplementary info. But the key issue is – what is the legal position.

On 1-Aug. Dr. Reddy started off with a very categorical statement “Govt rules do not permit supply of borewaters from an agricultural farm to others as a business.” On 2nd Aug, I wrote that there is no law that prohibits sale of water; environmental laws may prohibit pumping of so much water as may harm the environment, but even there the ban will be on pumping, and not on selling; and operation of this law is doubtful.

That put two opposing opinions on the table. On 3rd Aug, Dr. Jagdiswara Rao wrote “With his experience . . . Dr. P.R. Reddy must be quite aware of the government rules", thus clearly suggesting that Dr. Reddy is more likely to be correct. So I wrote a mail directly to Dr. Reddy asking him to quote the law/act that prohibits sale of water. That triggered two more replies by him, where he says he has “learnt” of the existence of a G.O. to that effect. (literally, this means he hasn’t actually seen the GO)

In any case, a GO has to have backing of a Law/Act. If there isn’t such a Law/Act then first it has to be legislated. A GO issued without such backing can be successfully challenged in a Court. (I am NOT saying it should be challenged. I am only saying it can be challenged) Meanwhile, several others have pitched in confirming that there is no law that prohibits sale of borewell water.

“Ask A Question” is a good idea, but it should be operated in a manner so that it reduces the confusion in readers' mind, not increase it. I request IWP to ponder on this.

Chetan Pandit


In Saurashtra region of Gujarat lot of water harvesting work has been conducted by Govt., NGOs and private bodies. The water harvested thus is the property of the society. Few farmers who have good tubewell facility are harnessing this recharged water fully and others are not getting the benefit of it. Some time the farmers are selling water to their neighbouring farmer also and in few cases water is supplied through tankers to towns on cost basis for domestic uses.

I think over exploitation of groundwater is to be stopped by the Govt. by imposing a proper law as per the local situations. As such no law is existing only guidelines are there for the farmers, which may be followed or may not be as per the wish of the tubewell owner.

I suggest do not think of such business which is morally unfair, because there are so many morally unfair business and Govt. can not make rules for every one. However, the citizens are understanding their moral and ethical responsibilities and do not enter in such business. This is also the same case and not advisable to make it a business
with regards
Dr. N. K. Gontia
Professor (SWE)
College of Agril. Engg. & Tech.
Junagadh Agricultural University, Junagadh
E mail:


Dr. Gontia, you have written “The water harvested thus is the property of the society.”

Please quote the Law/Act under which the ownership of said water was transferred to the society. If possible, please place a scanned copy of its text in IWP so we can all read it.

Chetan Pandit


Dear Joy Biswas,

You have to take written permission for drilling of Tubewell from respective State's Groundwater Department. You can go through the 'Groundwater Regulation Act' from Central Ground Water Board’s website.

S. Halder
Assistant Engineer (Agri- Irri)
Water Investigation & Development Department
Government of West Bengal


Dear Mr. Joy,
Your question deserves very simple answer. Yes it can be done.

In Pune (Maharashtra) and around the industrialist make an agreement with the person having the water source to supply water at certain cost. Besides water is supplied by the tankers too.

If you develop the water source or harvest rain water in the tank you can make an agreement with surrounding farmers to take your water at predetermined cost.

If you need any further information then please contact.

Prof. R. V. Saraf
Viraj Envirozing India Pvt. Ltd.
21 radhakrishna, near SBI, Paud Road, Pune 38

18. Deep borewell for commercial purposes

We are living in an area where the public dug around 40 meter borewell for their own use. Now, in this area one person has drilled a borewell of about 250 meters depth for selling water and supplying with tankers to other areas (highly priced) and extracting water in huge amount which has left the smaller borewells all dried up. We are facing proper scarcity. Can anyone suggest a proper course of action.

19. Borewell water sale from house in residential area-Is it llegal?

Is it illegal to sell borewell water from residential areas to others?

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